Mongo Atlas Security

Hi Team,
I have reading the security aspects of Mongo Atlas. I have been using M10 cluster for production.
Based on What I understood is by default MongoDB Atlas cluster storage and backups are encrypted at rest with default encryption. I assume here we are talking about EBS volumes or disk encryption.
Even I can see M10 Storage Encrypted in Atlas UI.
Whats Encrypted Storage Engine ??
Does it also su[pport default encryption or I have to enable it in UI ??
Please confirm below two statements
It would encrypt files and not underlying documents (data) as I read in documentation.
For data encryption, we can use Application Level encryption. Client has to implement Application level Encryption.